Richard Bruton (Dublin North Central, Fine Gael)

I welcome the Bill, and Fine Gael will support it on Second Stage. Of course we recognise this is of significant cost. It will cost €1.3 billion, which will raise our public debt by almost 1% of GDP. There is also an additional €7.2 billion guarantee into which the Minister is entering on behalf of the Irish taxpayer. The entire package, at €8.5 billion, is of significant proportions. There is an important element to this debate, which is whether it will work. This is the most central aspect we must debate.

In a crisis there is an instinct to adopt a plan and then demand unswerving commitment to it regardless. Often, the reaction is to brand people who question it as heretics, unpatriotic or populist. Perhaps that instinct is understandable. However, to ensure that the EU initiatives succeed there must be robust scrutiny. I welcome the Minister's willingness to enter into robust debate on this because it is an important debate; perhaps it is one of the most important debates we will have in the context of the development of the European Union.

We need to realise the eurozone is in deep crisis because of design flaws when it was first put in place. Those design flaws were not carefully watched after it was launched and this has developed into a full-blown crisis. We need to understand what went wrong before we set out a firm and clear solution. A number of things went wrong, as the eurozone embraced a range of economies which could not have been said to be convergent. There are clear structural imbalances between some of the economies. Germany runs huge trade surpluses with very tight control on wages and costs and is very competitive on international markets. It is rapidly expanding its exports within the eurozone. Other countries run huge trade deficits and have seen their competitiveness eroded. Some of these countries made wilful mistakes but a proper eurozone strategy should have sought to address others. However, the eurozone never had the tools to promote the type of convergence that was needed to confront these structural difficulties.

The eurozone also lacked stabilisation tools to deal with what economists describe as asymmetrical shocks, which are where crises affect some countries far worse than others. A stabilisation pool of some type is required to deal with this but the eurozone has not had one. We are now seeing the emergence of this.

Besides these very significant design flaws, the biggest missing element was the lack of clear understanding among members states of what was required of them to survive, thrive and prosper in the eurozone and to make their membership a success. We need look no further than Ireland to see how true this is. Our economic leaders forgot what it takes to succeed in a small open economy. This almost coincided to the day we joined the eurozone, perhaps it started a year or two prior to it. Its symptoms are there for all to see and I will repeat them because people tend to want to air-brush them out of history.

Gross spending by Government grew at 12% per annum after we joined the eurozone. This was more than twice as fast as it had grown prior to joining and 50% faster than the rate of growth of the economy. It was plainly unsustainable. Export growth collapsed to less than one quarter of the rate that had applied prior to joining the eurozone. This was an incredible collapse in our export performance and we lost market share consistently for six years in a row, from 2001 onwards. Unit wage costs grew at five times the rate they did prior to joining the eurozone. Significantly, this occurred at a time when Germany was decreasing its unit wage costs to zero growth. In just six years we lost 25% of our competitive edge, relative to Germany. House prices doubled in the years after we joined the eurozone and rose much faster than anything which had occurred there before. The exposure of our banks to foreign sources of funding went from 10%, according to the Governor of the Central Bank, to 60%. No one cried, "Halt". None of the regulators-----

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